CHAPTER 3 Marat CHAPTER 3 Marketing Role of Marketing ‘Themostimporentobjectivein any business is tokentty and satisty customers thus creating proftabity forthe fm. As result, marketing is ceil to Qantas. Many organisational departments are essriia te growth bot marketing ist the major revenue generating acti. ‘Qantas’ markoting pan and strategies ae mostly effective because ofthe folowing: ‘+ They have stowed Qantas to achlove ts business goals; +The marketing plan and strategies are very comprehensive; + Thor essence is o identity and satisfy customer needs (they are customer focused; +The marketing plan gives the business rection and helpe manage a changing envionment + They encourage new product development; + They emphasise more market segmentation; + They reste more clstibution outlets and + They focus on market research. NB Becavse ofthe proftabity fl in 2012 and only a modest proft in 2013 one could ao argue that ‘Qantas markt stages have been less effective. Qantas would argue that thi was more a reat of ‘extemal factors (high fuel prices, tough econcmic conltions, increased competion) than ts marketing ‘srateies. Interdependence with other Key Business Functions ‘Because ofits central ole, marketing at Qantas must be performed n coerintlon with other business setts. Finance at Qantas depends on matting to generate funds. Also marketing strategies lke Qantas’ ‘evr lounges, new check in faites, new carers fying nto Asta ave expensive and need to be funded, Qantas’ marketing plan includes a major tancial dimension. Budgets for each ofits business segments such as Qantas, Jetstar, freight ete and its related marketing strategies are key components of Is ‘marketing plan. Cantas' marketing strategies are judged using finance criteria Ike sales, marketshare and proftabity analysis. Peesaaeeecaygoe onoensoNnsemcntanncet QANTAS Busnes Cave Guay(CHAPTER 9 Martina “Tho rght staff at Qantas must be employed to creat the service that wl satisfy consumers. Staff can determina the fale oF Qantas’ marketing ers yet they avert under the dct contol of marketing, rater tis withn Qantas’ HR department. Therefore at Gants, marking algned with Hn veloping Joo descriptions and designing training programs, Operations at Qantas may constrain marketing by esteblshing physical limits such as the schedulng Of fights and the rollout of new inatives tke on ine check ins new fight entertainment etc. The use ‘of markating strats ike sales promotions and advertising can help boost sales ln non-peak tes to balp smooth operations st Qantas in mes of fuctutons In dean ‘The Marketing Process Figure 7: The Marketing Process 4 2 3S conduct), nwt) enaien cate) waue, Drains 2 ee 1, Situational Analysis ‘SWOT Anaiysis of Qantas Strengths ‘+ Mul brand svategy Qantas, Jetta) + Extensive nework/bat ofthe (Oneworld Allanes and the Emirates partnership ‘+ Highty competiive postions on malor international routes * 65% domestic markt share with about 34% ofthe corporate market “Very suocesfullaunch of Jetstar (usr and Asia) + leet lowering of costs and efficiency oars + cont purchase af ew arr, lunge Luparades, expansion of routes + Excelent sport locations and facstios + Globaly recogrised brand name and togo, + Excalent are) record + Lngost Australian based ang loyalty programme + Suocessul uel hedging programme 90 QANTAS Business Case Study TO 4 5 é ir aoa) cope) ier maae Weng Dama Ge) cuca Tee sels wisi + Significant protablity fs in eoem years (Gepecialy ins itemstonal operations) + Hab risk nature of arines + Aslatvaly complex feet of ara (getting bette) + Higher abour ad oer operating costs than some competitors Ongoing disputes between Qantas ‘management and mitantunens + Government refsal oft forion ovmerehio reetretions have reduced access to unde fe france feet expansion ‘+ Recent safety incidents have tarrished the CGantas mace‘Opportunities + Expansion of Jetstar iternalonals network pertculary Asia vis ew sings + Etauatng cther ont veriuze opportunities Wasa + Developing furher E-commerce operations + Pursue coun oppocuntiesn associated businesses (rave cate and feign). Ao protect rom the poaks and troughs of ‘cof ane buses (CHAPTER 9 Marketing Threats * Further weakening in the doreste and Intemational market/ economy + Competitive chalenges, domestica rom ‘Woh Austala aha Tiger Always an international especsaly from Asan ahd Midele Castor carers fan mor resent, Chinas) "+ Trroa thatJatstar anc Jetstar Intemational vil carrbalee! Qantas’ pencil routes and oreo its profanity + Further ncteaces nfo costs + Treat of further compettion nthe omeatic and international market “Increases government regulation fo protect its smaller ale ‘+ Fall inne Australian doar Gradual foreign takeover of Vrain Australia by Shoabore Anes, Ar New zealand ana Ethad ‘+ ‘Contnualy evolving ara technology * Taking advantage of aiation gow inthe ‘Aslan Paci regen + Further cevslopment.t alliance snd ‘odesharing relationships Competitor Analysis ‘Since tne cotapeo of Ansetthe only rel domestic competitor has been Vign Blue which was launched |n2000 nd curent clims about 35% of he domesticavation market. Virgin Bve's sence requencies tnd domectic network isnot ae extenlve as Gants” ut in the budget travel niche that Virgin Blue helped estabish, competion wth Gants is vigorous. Virgin Be has recent launched jin roquont fyer scheme to make inroads into the business segment ane has rdared regional as to compate on Cartas’ dominated thine routes, In 2011 Qantas’ competitor used the Vegn Austallan brand! on both domestic and intomational routes (replacing Vegin Blue, Pacfc Blue and V Australia). Therebrancing was aimed at creating les contusion and helping the airine gah passengers in markets lke the US where it lacked brand awareness. The Change inthe fine name also underscored a vansformaton to move the Virgin brand more up-market from alow cost afine to mor ofa ful sevice operator. The aine I also adding lounges, revamping ‘ight menus, unveling new aera with leather eeate and a classy new logo designed to challenge Qantas’ 8436 share ofthe cosporate market. |n201, Vigin Australia formed alianoes with Ethad to cover the Mid East and Europe, New Zealand to take over the Tasman, Delta to del with the US market anc SIAto move int te Asian markt, These alliances allow Vigin Australia to sharon each of ts partners loyaty programs. f passengers can eam Bolts when traveling on Vegi Austraa's partorarines they wil be more likely to travel on Vigin ‘Ausra domestica. Also, Virgin Atala can operate oversea services more cheaply by doing dale on fares and sharing feces such as lounges. In 2012-2018 Virgin Ausra really tured up the compaitve heat on Gana especialy inthe corporate ‘markot This has rsuttod in heavy dlecounting 2s Vigin Austra attempts to win market share. Tey have also jst opened ‘The Club’ which ia thei newer to Gantasinuation only Chalman's Lounge 1n2012 Virgin acquired 60% stake in budget cater Tiger Aways and 100% of West Australian regions! ena charter operator Siyweet,aleoisoves a 19.99% shareholzing to allance partner Singapore Anes ign acquired! Skywest to service te yf flyout mining industy ane charter markt to compete with (Qantas Link Now that Vg Ausvalia nas been transformed into more ofa premium carer the buyin of ‘Tiger Airoaye aimed at the no-ills end onthe market to ake on Jetta. The plan's for Tiger to operate ‘GANTAS Busness.Case Sudy 31CHAPTER 3 Mateing Under the same brand but as stand-alone business, The Tiger Hest wou exoand trom 11 planes to bout 85 aver 5 years. Tiger became Austral’ third domestic cara in 2007. They are backed by SIA And fy cut of Melboume to 13 destinations including the coveted Sydney to Melbourne route | proposed capital aise of $350 mon by Vig Australia rom shareholders AirNew Zealand, Singapore [Atos and Ethad has Gantas concerned, Tey fel that this @ strategy oF subscsing Virgin soit ‘an confine to undercut Garson protzle demestic routs unti Qantas can no longer suppor its Intemational network. It is alzo concemed that Virgin would soon be effectively onmed by 8 foreign ‘governments but ign International would stil be designated an Australian carrer, This woud give the Sarines, all of which compete wit Gantas iterations, aovess to urate rvtes, or trai hts. (On most interational routes Qantas competes with at least one ane that benefits from government ‘nership, contra or suppor. Iterationaly, Qantas has a numer of radtional competitors such as ‘Singapore rines, Ae Now Zealand and Cathay Pacfe. Recently Gantasis facing new competion rom Mile Eastern Cavers lke Emirates, Etnad and Qatar ae well as Virgin Australi, Doth Emirates, Etihad lend Qatar have inrensed ther quota of fights to Australia, SIA has added capac tts Melboume London route and V Australia and Dalia are now yng the Syn to LA route creating mare competion for Ganias, In 2012 Chinese anes (China Eastern, China Souther and Air China) unveiled plans to ‘aggressively expend into Ausra. International competitors have Increased capacty by 10% despite ‘htr decreses in demand from the recent eccnomio downturn, Product Life Cycle Canta’ marketing euccess canbe affect by ality to understand and manage the produc fe cyte Canta’ marketing strategies cannot stay constant over ts product's cya. At each stage othe product Iie cycle ants employs aiferent marketing sratogie (be igure 8 bow). Figure &: Product Life Cycle Stage PLO. [ Ean [charactors Marketing Statoxios Emploved reduction [Jtstar Japan New product. Stat up [Promote heavily. Penetration pricing weit commenced losses, strategy. Set up propre ition jn 2012 channels and bull brand awareness [GrewiiT7 | seater Gerace | Powrabiy fas Neteasea| | Encouragina brand oval wvoogh a and international |as sales have expandea._ linked FFS, expansion of routes and oth successhe yoarot line purchacing of mre aera. eouble ight capacity x growth [Growth Jester Asia |Proftabe for fret ime in New promational campaigns almed (Singapore) | 2000. Increasing sales and] at sustaining intrest. Recently added romain. new destinations Incing Crna and pen. Teking delivery of new arora. [Growin |ueiian Pacife [reasing ees and [New stong local print in Vietnam Metra prota [Arines. 6 sierat let planned to [ou te 15. Interatona sarees to [orrmence in 20% Matarty [Qantas [Sales leveling of los of [Radeaining paccaging/moaiy (demectic) competion! consumer _|marketing strategies choice. [eg intoducton of next generation check in, upgrading lounges, n-ight entertainment systems. Recucec prices to meet competion [Renewal [artes rtepatonal ostos halved | Ganceling orders for ow plates ana lnternationay — |inz01s. lest of oss making routes Recucing costs, enancing custome experience launch Enirates partershio. 32 QANTAS Bushecs Gane Study‘ Psboulentea cong Nomon un OS maisCHAPTER 9 Matting 2, Market Research Qantas uses market research to gather and analyse information to help it make appropriste marketing ‘decisions, Marking stratgies perform best when they are based on accurate, uptodate Information. whic Is detaled anc rolevant. Marks research at Gantas folows & logical series of stops outlined in Figure 9 beow. ‘Tho frst step in the market research process is Kentiying information needs e.g. customer needs, _tttudes, brand preferences, buying intentone and characteris, ‘The second step is to Kenly and select the daa source. Qantas uses both primary and secondary sources of data colecton. Primary data incudes engoing surveys of passengers In fight, mall based ‘surveys, complaint monitoring and discussion with customer contact staf such as cabin orew anc lounge staf. Secondary detaincudes government statics, afine magazines ar reported intraws wth compstiors’ executes. A 2010 Choice survey of 11000 subscribes rated Qantas third and Jetstar fourth as Australia's best dorestio aifie behing Vin Ble. Inthe survey respondents were asked to ‘at how stisio tholr most recent domactc ine experince was on things Ike cost, fight service, ‘seat comfort log room, feed quay, baggage allowance and check in process. Another secondary dat ‘source tapped in by Canta Is the Roy Morgan Research quarterly report hich provides information on ‘domestic ad intemational ane satisfactions ‘Te final stop [sto analyse and Interpret the data, For example, Qantas replaced ts cold food boxes with hot breakfasts and inners and a choice of menus for business class travelers ater the results of roan customer surveys. Figure &: Markot research process at Qantas 8, Marketing Objectives Canias! main marketing jective isto bulé 2 leading complementary brands, Qantas (premium aitine} and Jetstar ow fares ang) In 2014 Cantas' marketing objectives ar to: + Increase sales (evenue} and decrease cost xpentture) ‘+ MaintainGantas4etstars combined domeatc mart share of 65% + Match capacity with demand sustaining loads around 20% + Coninue to grow Jetstar in Asia + Increase customer service standards + Eshance complementary porto busnaesee tke Freight Peruse carer eremnsthanmmcensonmet QANTAS Buabass Coe Suey 88(CHAPTER Martina + Reduce losses of Qantas iterationl + “Tansform Qantas Intemational by focussing on right arora, right route, network optimisation ard ‘margin improvernent + Grow their frequent yer program membars and partners 4, Market Segmentation and Selection of the Target Market Narkot segmentation i the process of ving up the total range of potential or curent customers into ‘smaler discrete groups to facitate analysis and planing. Markst segmentation enables Gantas to * Better meet the ness of alts customers, o compete mere effectively, and to ttn francial goals ‘more ready; and *+ Better tune the markoting acto particular groups inthe market so the product an be refined, prices ‘22, plaoe of sale determined and promotion bettar focused foreach market segment eg, Economy. Business and First Clas travelers ‘Ganias’ market segmentation is complex because each segmont has distinctive and cferent needs ‘and expectation, such as the need to make stop-overs, the abil to pay fare levels and expectations In terms of n-flghtsenoa and comfort. (Qantas mainly uses behavioural segmentation to select Is target markets, Buyers ae distinguished e2cording to rp purpose e.g, business and lecure/non-busness travelers. Howover, thee are mary diferent easons for traveling within the broad categories of business and ire. ‘Tne business segments further broken down int routine busines (normal point to pent business travel, ‘onferences/seminars and emergency business wich also reflect passenger need and benef sought For example, a very senior manager equling to go overseas immediately bacause ofa cris has ferent ‘equrements toa nance attending a conference or aslesran who plans regular tip months Inacvance. ‘The lelsue segment is broken down ino hokey (lusve of tour segment, mul-desinaton touring ‘s2gment and weekender segment) and visting ends and relatives VFR). These categories ar ale further ‘segmented emogrephicaly into the typeof traveler based on age, sx, fly fe cele and income, Cantas is @ full sence premium cart. Because of changing customer requirements Qantas has lestabshec 2 numberof new arnes each with s own target market. Thess highly diferente brands appeal to ferent customer segments, * Jetstar (domes) targets cost sensitive travellers primarly on low yelcngllaure routes to Australian ‘estiatons tke the Gokd Coast, Sunshine Coast, Whitsundays, Calms and Agoe Springs. ‘+ Jetstar Intertional targets Issue travelers to dethatione Ike Bangkok, Phuket, Ho Ch Minh Cty, Osaka, Bal and Honolulu that were unprofitable Qantas operations. The stine ofers 2 classes of services, inlucing Star Class which wil be marksted to travellers wanting extra conor. * Jetotar Asia Jetstar Pact, Jetstar Japan and Jetstar Hong Kong (eo gain regulatory approval to target the growing ina Asi rave market 5. Marketing Strategies 2) Positioning Positonings the image that Qantas projects in rlation ots compators, Gant bring attention to its service by using verily of positoning strategies: * By positoning in relation to its competition Le. by launching ts own no-fils carter, Jette, Qantas thes arested the erosion ofits markst share to Vigin Blue, HTS Bunnees Case Sixty “PREG Menor One miamaceCHAPTER 9 Marating + By postonng la relation to a taget market Lo. Qantas has concentrated on securing the herative corporaterbusinecs market trough is City Fyor express sence, ounge upgrades, Frequont yer ‘Scheme and Qantas Clb services +) Formulating the Marketing Mix Product Figure 10: Product Strategies Product is the buncle of atirbutes and benefits designed to satisfy Qantas’ customer needs “These include: + Scheduling features: tho route frequency, tine of departure oF anv, number of stops or drect tights ane the area type. Gantas, es the largest and strongest domestic carer has the most ‘comprehensive national coverage, ntas’ Cty ier express service means there ae fights every half an hour in peak porods. Qantas tok dalvry ofits fret Abus ASEO in 2008. The bigger AIBO® ‘alow Gantas to offer increased passonger services and fights leaving avery 18 minutes betwen Sydney and Melbourne. Jetsay tes om Melbourne, Syeney and Bane mainly Yo Australia kisure destnatlons such asthe ‘Gold Coast, Sunshine Coast, Cass end Tasmais. Jetstar International fies to destnatonsin Asiaans ‘the Paci. JotstarPaci, Jetstar Asia, Jetstar Japan amd Jetstar Hong Korg tl mainy todestinaions Ina ‘Qantas enances ts basic product by having the best connecting fines ona prefered basis with ts ‘Onewora sn Emirates Alsanca, *+ Comfort based features: (components of packaging) include lounges, n-ght meals and crnks, In-fight entertainment and seat with, For example: + Qantas has overhauled ts food menu insp¥ed by renowned chef and restaurateur, Nall Pery. “+ Qantas nas chosen to configure its new 880s with 450 seats n four classes, 14 fst class, 72 business, 32 prenium economy and 382 economy. Each of the fst class suites contalns & large armchair wth inbult massager Pat converts toa wide, fat bed and a 43cm LCD seroen In Business class the big improvement sa fly at 2m long bed. There are Siem eoreens and a smal lounge and standup sf service bers. In premium economy the seats do note ft but do ‘cline and there is much more legroom. All passengers can gain access to wsbmall and SMS ‘canbe sent and received. Laptop and USB ports are buld into every seat ans mare than 100 ‘movies ae avalab, “Dace cp nom ope enc GANTAS Business Case Stucy 98(CHAPTER 9 Matting ‘+ Flght Update sends dota of fight doparture testo frequent Byer customers using mobile ‘hone shert ext messages. In addon, Qantas hs just launched an SMS toket booking systom for dotsan *+ A Total Entrainment in-fight system has boon inctaled on tho Qantas international fest. The system offers In-seat personal telephones, video games and 16 audo chanaols, + @antas nas recently spent millons upgrading Is domestic and intemational lounges. + Qantas has just aunched its new generation check in makng check n and boarding a seamless ‘experince. In addtion tothe existing online check in and sai sori Kiosks Cantas hes added ‘mobil checkin, fly automated checkin using chip enable frequent fier car, automated bag rope and electronic bag tage. + Qantas Ciub business customers enjoy private meeting rooms, workstations, photocopying and local faxing services, postal services, personal message service, rteshmenis, news snd ‘ntetsinment and hot shower inthe exeatant Club lounge tel major Australia ports, + Gantas recerty launched ts new Intemational Business Cisse, feturing Skybed - a state-of-the-art, cocoonsiye sleeper seal, specialy trained fight attendants, naw food and win, premium quay noise cancelation headsets and a self service bar for drinks and snacks. Now dedicated Businace Class lounges were racentyInroduced offering private work sutes and wireless intemot access + ants was one ofthe fst anes i the Wot! o rol utn-ght mabe and intanat services “+ Qantas is curently oferingwieossinfght entertsinment and Pads. + Tho Qantas Froquont Flyer Scheme [FFS) with more then 9 millon members and hundreds of ‘rogramime partners is used to retain customers ltionship marketing), increase markt share and ‘il otnernise empty seats. Members accumulate points manly through fying with Gantas or te partnrs. The FES also provides a lage database of specic custome information thereby prowding ‘dation valuable crect marketing opportunities for Gantas. ther companies such a hots (4.000 around the wore) and car rental fms also participate. Points eared inthe credit car loyalty programmes of American Express and Qantas Telstra Via Card anc th selected programmes of @ ‘umber of banks may be converted io Cantas Frequent Fyer points, Weolworths became a arts Frequent yer programme partner in 2008. “Intangible benefits such asthe Qantas history and safety record and + Brand name: Qantas sone of Ausraa's leading brancnames and itis apoweruimarksting ool. The brand name, kangaroo symbol ard ogo, ‘Spit of Austral’, leary identity Qantas and distinguish It from its compettors. Qantas has adanted Is fying Kangaroo loge te ft the tall ofthe new ABO tral. The new design Is more contemporery and comes witha new Qantas typetace with thinner, stael grey leer, Qantas has ated that negative publi in 2008, 2010 and 2011, suroundlng a ‘sees of maintenance mishaps and instal action has damaged its brand, Price ice isthe cricil element in any marketing plan. Price Is the variable which can be changed quickly {and as often as required. Inthe past, prices were regulated bythe Intemational Ar Transport Associaton (UAT and tne Two Aitines Agreement which had a formula fo al fares based on fag fal and astance Pricing methods used by Qantas include a combination of ‘+ Cost plus margin: Qantas determines the cost of productlon and then dds a margin for prof + Market: most fares at Qantas ar determined bythe market, where demand ls matched with supp. *+ Competition based: monitoring what other srines such as Vegi Bive ae charging. 98 OANTAS Binhaas ae Sim) Mr tocnaretin covet emi Oh pepeCHAPTER S Marketing Pricing strategies employed by Gantas include: + Price Penetration: Qantas uses this strategy Qowest possible price) for Jetstar + Ful Fares: for those wanting exsbilty (important for busines ravllers) fll fares can be refunded ‘and changed, + Promotonal Fares: these are not advertsed as aciscount onthe ful fae. 2096 of, but are quoted ‘8 aprice. They are usually offered inthe economy’ cabin at times of eubdted demans of to match ‘competitors. Other promotional fares can be conditional such as: Departure time imitations: defines the period of doparture which allows Gantas to oer low cost fares outside peak domard periods. = Packages are sold se pat of an ncusive hoy, which includes hotels, mess and transfers, + Loss Leading: Gantas used this pricing sratogy when it fist launched Jetstar in May 2004 and Jalsa Intorational in November 2008 by introducing rciovously low fare to gln ial market ‘hare, Recent, Gantas offered fares on its Sycney-Melbourne route as low as $18 to colncide with “Tigo Airways entry. Promotion Figure 11: Promotion is the means by which an organisation communicates its products and ts image to the ‘consumes. The promotional strategies used by Cantas are contained in Figur 14 above Promotional stratogles used by Qantas inclu: ‘+ Advertising: Qantas uses adverising agencias to create media advertizoments for eevision, ratio, Imagenes, nevepapers, brochures, posters in travel agente and allboards (¢.. thew Isa gant billboard erected above Cantas Drive). In 2004 Qartas rehet its famous 1 sil call Australia home” ‘commercial at an estimated cost of $10 milion, making It the most exoensive advertisement in ‘Australian history ts advertising debut was the fst commercial breakin the opening ceremony ofthe ‘Athens Olympic Games. Jetstar has used television advertising staring comedian Magda Szubarsk. “Qantas, the words most experienced alfine’ was the theme of Cantas' major advertising campaign ln 2008, In 2000 Qantas laucnee a mult-milion dolar acvertsing campaign almed at lung back koy business customers. in 2010 Qantas ennounced a3 year $44 millon advertising campaign with “Tourism Australia, n 2012 Qantas released a now advertising campaign "You's the reason we fy’, ‘eaturing Sivercair ronan, Dane Joon In 2013 this much crcised campaign wae ditched and _agontle instrumental version oil call Australia home! was introduced. Caneasis trying to use ese ZERAEEEISGI™ homeo QANTASButess ano Guay a(CHAPTER 8 Markatng biankot advertising and more crect marketing, wich is cheaper and much more targeted especialy ‘tocorporations. The cisacventage of mecia blanket advertisements is that many peopie receiving the ‘massage are not the target market unless that advertising Is purl or image or band recogaten. + Sales promotions (short term inducements) pariclay in periods of subdued demand, “When (antes fret aunched Jetstar Ieleased! 100,000 tokte at $49. Cantas ag launched a two-for-one ticket sale, which slowed a second passenger to ly for the costs of taxes and charg ‘+ Personal seling based on sales representatives who sal directly to travel agents, businesses and ‘overnment departments ‘+ Publllty to enseres the Image of Gants includes news releases, este articles, press conferences apd interviows. Cantas has uood US acto, John Trevolta as a brand embassacor (opinion lace). (ants alco epontors a numberof sports such as rugby urion, NAL, retbal and ewining, ‘The company supports and sponsors environmental causes such as Clean Up Austral a6 well as charities such as CARE Australia the Staright Chen's Foundation and Word Vsion; ane cutal actives suchas te Australian Youth Orchestva, Sydney Dance Company and Art Galery of NSW Place/Distribution “The product must be eas to nterace and purchase, cthervse no rater how good he reduc, the seg vlbe constrained, Disubuton to end customer ie achioved by Qantas In tw ways, rect and Indrec: Direct (ale of products direct to the consumes) ‘+ Direct sles via its own ret outets. Qantas has 2 ntwork of wholy owned Gantas Travel Centos calod Gantas Holays (he largest travel wholaalr in Austral). Qantas has leo bought into Via, setst anc Jtabout which reduces the bkelhood of the owner entity seling competitor tickets. Tis represents vertical integration ofthe distribution chain: 1 Telephone sales centres; + Airot ticket sales; and ‘Tho Intomt is emerging asa sigrificantcistibution henna for Gartas with the umber of intrnot bookings growing. Leisure travel Booked via qantas.com reprecents 67% of domestic bookings and £8156 af international bookings. Jetstar sells more than 90% of ts tekets online. The Qantas website Is atthe top of the league tabi of heavily used sts in Australia with over seven and a half milion ists each month. This saves Qantas as much as $30 per seat fom call centres and travel agent feos, The Ganias website was revamped in 2008 and become avalabie to a greater number of Ganias customers worldwide, with the lout of onine booking capably in an adstlonal 34 courts and languages. treceles over 8 rill vist per month Indirect (sing itermesarios) ‘+ Through travel agents: Gantas has strong relationship wih a numberof other reall agency chains Including American Express, Commurity Travel, Fight Centre ard Harvey Werld Travel. Cantas is selective about who reels the product and looks fo Intermeciarles that have a good reputation, financial stongth and expertise. These marketing intermediaries are responsible forthe majority of bookhngs and ticket sales for Qantas, but not having conto of the maln cstibuton source Is 38 QANTAS Busnes Coss Sudy _—_‘etowo mahal Gora Nonon hon hint bapeCHAPTERS Maktng ‘rucrating for Gants, Also, agents got commissions on ther sale, which reduces potental Qantas revenue, Gantas hes reduced commission rates pad to travel agents to cut costs and encourage Intemat bookings. A large and growing proportion of product eisbutton I made by sophisticated computor systemselecrenic mears calle the Computer Reservations System (CRS). These are ‘ade avalable by Ganias to travel agents. People ‘The quality of Qantas’ senices depends onthe abilly ofits humsn resources. Because most customers have direct contact wit Gantas employees, especialy onthe ground (trough cketing, checkin and ‘baggage handing). the impression they give has &big impact on how Gantas Is perceived. Qantas stat! (over 33000) must rave appropriate persoalatibutes and taining fr ther jobs. Qantas spends more ‘han $275 milion a year on staff raining to ensure a very postive interaction betwoan ts customers. Processes Cartas implements effective processes to ensure ts service is provided in atimely fasion. Customers Judge an airine by now efficient and customer trendy its processes are. For example Qantas’ now (Bag Tag allows passengers to check n her baggage wihout attaching temporary baggage tage. You sre abloto drop yourbags and go, makngit much fase. Also these tage sore fight detals so your bags can be easly tracked, Other examples ofthese ecient processes at Gantas include: veo sroclpt we ey psy ‘Sectors TEEEIESEagyes ommre on eememseemennt QANTAS Bis Cae StayCHAPTER 9 Marting Figure 12: Mobile Check In 1 Select x gests Scaring passes tana Fon ‘ihe eae feito teow Physical Evidence Cartas’ customer decisions are influenced by & whole range of physical aspect (the envicreant in which Is services are delivered). These include Qantas’ egnage, ts web ste, ks terminal, lounges and Uniforms, Cantas provides a uniform for lsat to improve ther professional appearance. n201S Gantas switched ‘0 a news uniform created by Melboume-bom but Pare-based designer Martin Grant. The aboriginal pins were cliched in favour of clean European cut based on French navy incoporating elamenis of (antes red withthe odd pink ighight (se figure 14). The total warcrobe comprises some 35 incividual garments, Figure 14: Qantas tight attendant uniforms 40 QANTAS Busass Gate Study cots a(CHAPTER 8 Marketing } E-Marketing E-marketing uses an elctronic medium (intrel to perform marketing activities. Qantas mainly uses ‘e-marketing ve + Ema for example Qantas sends out Frequent yer points balance emals oa thr Frequent Flyers every month = thie includes their point balance, But alo a couple of special offers like ght end secammodation dea. + Wb site, where customers can book flights, find out about fight dots and the latest product Imovations such as wireless infightenteranment and bag tags ete. ce Lack of personel approach Tener nea ie eae ak ca aca, Sealy many) Increased abilty to measure and collect cata Securty, privacy lssues 1) Global Marketing Global marketing is the extension of marketing activites across national boundaries, Qantas uses a rurnber of lobal marketing strategies inlucing: + Global Branding (Qantas uses the sams bran nd logo giobal (ying kangaroo) Gants strong global brand allows Itto increase tr interatonal revenues and growth. also helps protect them ftom Intemational Compton. It gis the ating instant recagnitien around the werld representing safety, reliably, engineering excelence and customer service. Global brancing also hai to Improve margin By tiving down packacing, design and advertising production costs. + Standersstion Canta stardardises most elments of temarketin mixsuchas product desig, brand name, packaging, isrbuton and product postioning, This approach alows Cartas to gain econorries of scale rom a bal marking mic Most ofthese marketing ctrtenies are aliance Based, Abarces cea a larger range of global products fr exsting custome’ (othe One Word Explre fr, aroun the weds fare, reciprocal fequant er programmes, recprocallounge access and global eight co-operate), eduing ‘he chance tat they nee to yong hla maining th peresptin hat Qantas offers trevor & ‘seamless travel experience, The One Word name an logo appear ona member lanes and tekst, helping Gartas to prove ts cerporataimagein naw markets. Theoe alliances alow Gantas to capture a rte share of the market and of the prenium customer segments in partcu. + Customisation (Qantas had planned to use a customised (aiferentated) marketing with ts new premium aie in Japan but pulled out in 2012. Qantas would have adjusted its marksting mix elements to sut ths particular global target market. The alfine would have had a new name, new look and adopted a ‘more cutwaly senstve style, The iflght menv would have focused on Asian dishes ane flight aterdantsfuentin Japenese Deke cage wm emiewereameemnnmrst QANTAS Binns Ose Suc) 41CHAPTER 9 Mersting Figure 15: Global Markoting Strategies ‘Standardisation 6. Implementing, Monitoring and Controling the Marketing Plan Implementation isthe process of tung the markting plan into action. Because many unforsst rents cocur during implementation ofthe marketing plan, Qantas hes a systemic base for continually ‘monitoring, controling and adjusting is marketing ctvites using the flowing too: (0 Developing nancial frecastof revenue using statistical made, pasteles data, executvejudgment and surveys of consumer buying intertions. It then estimates costs such es marks resoarch costs, promotion costs, preduct development costs and distribution costs ( Comparing actu! and planned results using number of performance criteria, These include + Sales analysis: breaking down aggregate sale by eiferent pocucts, segments and tertoies; Figure 16: Analysis of market shore Market share - Domestic Market share i gear a Gs Bar lui Tn: mOantas © Jotstar + Market share analysis: comparing business eales wth the pertermance ofits competitors (Qantas domestic marketshare has stabiliser to 659) + Market proftabity analysis: measizes the profitably of products, segments and tetories as a percentage of sles (fer Fig 17). Jetstar was again the star performer in 2018 but sured from a Capacity and price war with Vigln Austral. Qantas intentional tl record a loss but this was & Sighcant improvement on 2012. 2 seStudy __‘rbowieusstco: Hema inCHAPTER aati Fre 17: ets of protabty by busines seamen lions) ee om Oars eSEO py aso e i Pign @ Susy 2? oi * sess em twat vor ‘Qantas Frequent Fiver, 280. 1 a2 328 228 as et = 6 @ 2 7 (a) Fevsing marketing strategies and taking comecive action where appropriate, For example, Qantas recently undertook corrective action by = icing plans for anew premium Aslan aline In 2012. = Underakng a comprehensive aust fits international operations I 2011 and 2012 response to significant osses. Qantas has undertaken comectve action by canceling orders for new Planes as wel es eating poor performance routes. = Qantas nad forecast a 6% growth in 2009, but actualy experianced @ 1.2% reduction mainly ‘dueto the Global nancial Gs. Gantas revised its marketing strategies by lowering pices to ‘stimulate demand, reducing fiat requency on come routes, canceling and delaying orders for ‘new planes and reconfiguring is planes with more eccnemy seats. = Invoduoing ts own Budget domeatc carr Jetstar in May 2004 to counter Vigin Blue's Increasing shar of the aviation market. = Expancing Jetstar in Asian markets to take advantage ofthe aviation growth in the region. = Invoducing anew domestic fate structure which was simpler and more exible. + Ditching unilocated seating for Jetstar. + Ang Australian Atines asa brand on 30 June 2008 end using Jetstar neatonao fl theo. ‘The banc reste i ims to recover market snare lot o airin ke SIA and Eman, Figure 18: implementing, Maintaining and Controlling the Marketing tan, [implementing merketing lan In thore deviation fom pian? iteknatent nS Non tan WpenmatwNsonTt QANTAS Busnes Case Sty(CHAPTER 8 Marestng Ethical and Legal Aspects ‘antes hasan ethical espera to ts custmare and an even brosderresponsily to soclty asa whole Inthe merting offs prots. Qantas’ sdvertsing, promotional and marketing mater must comply vith ‘conaumer protection ie ke the Compettin and Consuar At, Ml mater sreviwed bythe QartasLogal Department before publceton to ensure campilznoe. Qantas als to produce envecemontaly responsible products. Ithes iroduced bored meals which substantially reduce wast and has also inode Hitting {and ar condoning improvements using solar energy, reducing Ks greenhouse gas emissions. Qanias has ‘lo extended its participation in noise abatement commitees and has become a key pater of Landcare ‘Ausiali However, some recent marketing decisions and actvties have beon challenged as unethical + Qantas was tine milions of dole by the ACCC and simlar overseas bodies ater cllusing with ‘other itn to fx fel surcharges on its cargo fights tothe US. ‘Cut-proealine Jetstar was put on notice in 2007 to tretits customers etter or face possible action under the Fair Tang Act. Consumer Alfars says that Jetstar isthe subject of a dsproportionste numberof complaints by aine passengers. Most of the complaints related to Jetstar's enforcement ‘of contract tems and condtions such as the stipulation that fall to check in 80 minutes before the scheduled departure vil be denied aocess to he ight ard ore the fare. antes now publishes the true costs of fares including previously hidden extra charges and levies folowing a warning trom the ACCC that was misleading consumers. Cantas boosted the numberof requent fer seats and was forced to improve Its website to satlsty ‘the ACCC that ts customers were adequately informed about resctions on award redemptions. antes was accused by the ACCC of anl-competitve behaviour under the Trade Practices Act by incressing the ttl ruber of sets well byond passenger demand, thus ensuring no cater onthe route was prota. Canias was accused of ambush marketing’ during the Sydney 2000 Olympics when it inked ite to ‘the Olympics in advertising campaigns eventhough kt was not an offal eponeor. + Qantas’ logo for is new Austtalan Anes has beon labeled a “tying rip of forts resemblance to Aboriginal at. *+ Qantas was cttcised for using a photograph of a ten year old Aboriginal git, Carol Napangard, wearing face pain in an advertising campaign. The media vised her home ina remote part of Wester Australia to discover that she was living in "Third Werld'condttons. Her ea Ife bore litle resemblance to the postive image Gantas was portraying in its ety biboards. 44 GANTAS Binns Case Sty ate satett cae nem he pene(2) (ee leleter bls] a7 TV OTR ales